In the wake of studies that found that tax returns filed by paid preparers can be riddled with mistakes, the Internal Revenue Service is clamping down on the industry.
Up to now, paid tax preparers in the vast majority of states were free to hold themselves out as experts without any training whatsoever. Nor did they have to prove any minimum level of competency.
“The person who cuts your hair generally has to have a license where he or she operates and has to undergo basic testing and qualification procedures before doing so,” said David Williams, director of the IRS’s return preparer office. “How is it that the individual who has access to perhaps your most significant set of financial transactions during the course of any given year has no requirements for competency or oversight at all?”
Hence the changes. First up, beginning next month, the IRS is rolling out competency tests for hundreds of thousands of tax preparers nationwide. Next year, continuing education requirements — 15 hours worth per year — kick in.
Industry executives are divided over whether the cost of complying with the new requirements will trigger price increases for consumers. But the de rigueur complaints about excessive regulation are noticeably absent in this instance.